Inside Canada's national butter reserve, the government stockpile that ensures you can do your holiday baking

In a warehouse in a suburb east of Montreal, there are hundreds of thousands of kilograms of butter, one-pound bricks for grocery stores and 25-kilogram slabs for commercial bakeries, all kept on pallets that are so heavy the rack needs to be reinforced with steel to hold them.

The butter is owned by a federal Crown corporation. The Canadian Dairy Commission (CDC), created in the mid-1960s to manage the national supply of milk, keeps a reserve of frozen butter in 18 warehouses around the country.

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A pound of butter is enough to give every person in Canada a pound.

The program is supposed to solve a problem. Milk isn't produced evenly throughout the year by cows. When consumers want butter the most there are ebbs and flows. In the winter and spring, cows make more milk because it's cold. Demand doesn't peak until the fall when food manufacturers ramp up production.

Farmers dump their milk in the spring and bakers run out of butter in the fall because of the mismatch.

Christine Boutin is CDC's senior director of commercial operations and marketing.

We go crazy whenever a liter of milk is dumped.

The person is Christine Boutin.

The commission buys excess butter from dairy processors at a set price and stores it in third-party warehouses around the country. The CDC sells it at the same price when demand increases.

The domestic seasonality program is officially called the reserves. It is the most boring way to describe a project like this, and that explains why so few people know about it. When dairy companies warned that low milk production and job vacancies could lead to a holiday butter shortage in the United States, the point was to guard against that sort of anxiety.

The manager at the warehouse in Sainte-Julie was looking at a map that showed the government butter and other clients. Guys come in and out of the place and they are steaming like hotdogs on hot days because it is so cold.

Wall of butter

We were taken to the back of the warehouse. He said that all of it was in the reserve.

The wall of butter was 40 feet high. All of it was packed in boxes and the boxes were put together on a pallet. Many of the dairy companies had already drawn on the reserve for the holidays and that was just one aisle of one warehouse.

Between eight and 15 per cent of Canada's annual butter production can be found in the butter reserves. According to Statistics Canada, Canada produced over a hundred thousand tons of goods last year. There could be as much as 37 million pounds in reserve. An elephant can weigh up to seven tons.

Simon Somogyi is a professor at the University of Guelph and he wondered if that was too much.

There's the electricity. He mentioned the salaries and wages. The question of how much reserve is enough is a multi-million dollar industry.

The cost of warehousing butter goes to the consumer. A pound of butter costs about half a cent.

Quirk of the system

It is not out of the norm for governments to stock up. The European Union built a "butter mountain" of surplus dairy in the 70s and 80s. China has a large amount of pork. Under President Jimmy Carter, the U.S. began to bail out farmers by turning excess milk into cheese.

Evan Fraser said government reserves have fallen out of favor in the age of the global marketplace, written off as expensive and inefficient. He said in an email that reserve systems might be getting a second look after the food shortages caused by the Pandemic and the war in Ukranian.

Canada has a butter reserve that has been around for decades. Poultry, dairy and eggs have been protected from the open market by the federal government. The idea is that by setting prices and controlling how much is produced, the government can strike a balance between supply and demand, guaranteeing that farmers get a stable price.

The price of butter goes in and out of the reserve and is set by the CDC. There can be controversy about that process. Critics accused the CDC of being too secretive after a series of large increases to the price of raw milk and butter.

According to a 2006 history of the dairy commission, the CDC has been storing butter for over 50 years. The first year of the CDC, it bought over a ton of butter from New Zealand due to fears of shortages.

Butter from New Zealand has become a hot topic in the future. High tariffs on imported dairy are put in place by the government to stop international challengers from undercutting Canadian farmers.

New Zealand and the U.S. have accused Canada of sticking to its protectionist ways and using loopholes in trade agreements to limit the flow of foreign butter and cheese.

Cows like it cold

The system is working well for the largest dairy processor in Canada. Natrel is a brand of butter. The production peaks in the spring.

Milk production fluctuates due to weather. Stephen LeBlanc is a veterinary professor who leads the Centre for Dairy Research and Innovation at the University of Guelph.

A large portion of the butter is sold to the CDC reserve program. Buy back in the fall.

When the orders start coming in, Agropur sends trucks to collect the pallet of Natrel, or the suitcase-sized slabs of commercial butter in blue food-safe bags, and deliver them to the supermarket distribution centre or factory that needs it.

Without the program the processor would not be able to supply the market in the fall.

There is a good chance that your butter has spent some time in limbo, locked in a government-leased purgatory, waiting in a cold, dark warehouse until someone wants it.

The email address is jedmiston@postmedia.